City raises stakes, questions in convention race

If you want to win an arms race, minor escalation is not the way to go. Only after President Ronald Reagan started developing a wildly expensive and impractical system to shoot down enemy missiles did the Soviet Union give up the Cold War.

The $900 million proposal by Willard Hackerman and the Greater Baltimore Committee to combine a sports and concert arena, luxury hotel and meeting space presents a new level of aggression in the convention-center race, which has drained money from taxpayers and subsidized Shriners' meetings across the country.

Apparently, other towns don't have the triple threat that Baltimore is talking about, at least of this size. In 2015 or so, you could attend the Madonna comeback concert, check out the American Accounting Association confab and take a bath, watch TV and go to sleep, all without going outside.

Not long ago, Baltimore civic types worried that the city didn't have a big headquarters hotel to go with its newly expanded convention center. This plan would double convention space yet again and produce a second headquarters hotel to go with the Baltimore Hilton Convention Center Hotel, which opened in 2008.

Best of all, Willard Hackerman, the 92-year-old owner of the Inner Harbor Sheraton and boss of construction giant Whiting-Turner Contracting, says he'll raise $500 million privately to build the hotel and arena, leaving $400 million to come from public sources for the meeting-space expansion. ("Only" $400 million. The last convention-center expansion, completed in 1996, cost $215 million in today's dollars. The Hilton cost $300 million.)

It all sounds swell, and everybody's grateful. "Thank you, Mr. Hackerman," Gov. Martin O'Malley said at last week's GBC meeting, sounding as if he'd sold the tycoon magazine subscriptions to pay for summer camp.

Well, Hackerman and his partners aren't in this for charity. The case for doubling convention-center space is not inarguable. Even if the project makes sense and gets built, it raises new questions about downtown development and taxpayer investment. A few things to consider:

•What kind of tax breaks and other deals will developers seek? It seems as if hardly anything gets built in the city these days without a giant tax discount — tax increment financing, "payment in lieu of taxes" and so forth.

Boosters will argue that new, less-than-sticker-price taxes are better than no taxes and that the facilities will create spinoff prosperity, which may be true. But the numbers will be crucial, and we haven't seen any numbers.

"We haven't gotten into any of that — whether he is going to ask for any and how it's going to work," GBC President Donald C. Fry said of tax discounts and other incentives.

•John Paterakis' Marriott Waterfront on the east side of the harbor got a $5 million grant from the city and $5 million loan. It pays $1 a year in property tax, although it shares profits with the city. Is that the kind of "private financing" we're talking about for a new Sheraton? Seems only fair for Hackerman to ask for the same deal.

•A bigger, spiffier, more-connected Sheraton will put competitive pressure on the city-owned Hilton, on the other side of the convention center. If it approves the new hotel, is the city cannibalizing its business interests?

•The proposed 18,500-seat arena would be about the size of New York's Madison Square Garden and, like the Garden, would be privately owned.

Is that the right size? How would the interests of Hackerman and the other owners align or conflict with those of the city and the state? What if the arena ends up competing for events with the convention center, M&T BankStadium or Oriole Park at Camden Yards?

•As envisioned, the arena and hotel would be part of the same structure. But sports arenas don't age as well as hotels. When the arena needs a major rehab in 2035 and the hotel is still viable, what happens?

•The previous arena plan — to replace 1st Mariner Arena on its existing downtown site — was part of a larger scheme for revitalizing the west side. What happens to that space now? A park? An office building? Where does that money come from?

•Is the convention center expansion even necessary? At some point the convention battle will become unsustainable. There are only so many groups that want to congregate, eat bad food and watch PowerPoint presentations.

Anyway, the Soviet Union would have collapsed without the pressure from Reagan's "Star Wars" boondoggle.